Institutional cross-ownership of peer firms and investment sensitivity to stock price

• Main Authors: CHO, Young Jun, YANG, Holly I.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2022
• Subjects: cross-ownership; institutional investors; managerial learning; feedback effect of prices; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/1999; https://ink.library.smu.edu.sg/context/soa_research/article/3026/viewcontent/SSRN_id3682404.pdf
• Institution: Singapore Management University

Theory suggests that stock price guides managers in corporate decisions as managers learn from price. We reason that cross-ownership lowers information processing costs and increases industry specialization, improving revelatory price efficiency (Bond, Edmans, and Goldstein 2012). Consistent with ou...